A Changing Tech and Legal Landscape in Corporate

Whether it is personal, customer, training or other data, one thing is clear: data continues to be an important currency and revenue driver for companies. Rapidly changing technology, coupled with developing regulations, requires companies that use or disclose data to be extremely vigilant to stay current. Today, companies struggle to keep up with seemingly nonstop changes to state-level law. These struggles are exacerbated by quickly developing regulations and regimes overseas— creating challenges for international data transfers and international transactions. To optimize the value of their data into 2025 and beyond, companies should consider addressing these challenges with a new focus and additional precision in their commercial agreements.

One of the fastest developing verticals, in terms of both technology advancement and the law, is artificial intelligence. Because of these rapid changes, companies should carefully consider the potential impact of AI on their assets and agreements. AI has made and likely will continue to make data assets even more valuable, but it most certainly will introduce new challenges and risks, including in the privacy and cybersecurity and intellectual property areas, if it is not properly managed. Companies should first consider assessing what their existing agreements mandate regarding AI in these areas.

They should also consider what type of data is being used and/or potentially developed under applicable contracts. Companies may want to carefully consider what information disclosure they require from counterparties about the counterparties’ use of AI, including whether and in what context they are using AI. It, then, may also benefit companies to consider what data protection provisions may need to be added to existing contracts, as well as what should be included in future agreements, such as provisions regarding the use of the company’s data as training data for AI. Companies should also consider how the parties will address new and developing laws that are introduced during the term of such agreements. Additionally, with new AI regulations and regimes developing, companies will need to ensure that anyone processing their data does so in compliance with these new regimes.

Companies may want to assess what kind of information disclosures are appropriate to require of counterparties in transactions in order to be fully informed around the AI use cases. Companies should also consider what types of off-ramp termination provisions should be included in their transactions if a counterparty is not meeting stated data processing requirements, protection goals, or required informational covenants.

Transactions involving complex data and cybersecurity components may even usher a wider use of cutting edge, party-friendly contracts. Visual contracts are legally binding agreements that are designed with an emphasis on visual components such as charts, diagrams, and illustrations.

Visual contracts could be particularly useful in agreements involving the diagraming of networks or scoping of important system boundaries. Organizations may turn to visual contracts in lieu of dense, technical language that may not define a system as clearly as a simple network diagram. Even further, companies are beginning to explore how virtual contracts might be developed using AI itself, where the parties ask a question about an obligation to an interface and a response is provided detailing what each party must do to comply under the agreement.

Only if companies keep on top of changing privacy and cybersecurity obligations will they be able to employ the appropriate strategies to fully contend with the evolving legal landscape to maximize the value of data.